The governor make three health care reform proposals, including one that would allow Minnesotans to buy health insurance across state borders.

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Pawlenty wants the 2010 Legislature to consider his initiatives.

"One of the governor's plans is payment reforms and looking for quality over quantity -- that's something that the Legislature has been working on for a number of years and we've always inquired the to governor to be a participant in payment reforms, making sure we get the best value for our health care dollar," House Assistant Majority Leader Larry Hosch, DFL-St. Joseph, said in an interview.

"We welcome the governor back into those negotiations," Hosch said while in Bemidji last week as a keynote speaker for a health care reform rally. "He's had a change of heart in some of the position's he held in the past."

The Health Care Access Commission "came out with some strong recommendations for payment reforms that we had to scale back a little bit in order to get the governor's signature," Hosch said.

In addition to allow sales of health insurance across state borders, Pawlenty also proposed that MinnesotaCare and Medical Assistance public programs be required to price health care services based on quality and cost, and that consumer-driven incentives be included in MinnesotaCare.

Minnesota Advantage, the state employee health care program, successfully uses a tiered provider system to rein in costs, Pawlenty says. State employees can choose any clinic available to them in a private market system. But those choosing most costly and less efficient clinics are required to pay more out-of-pocket.

Pawlenty is proposing that state-subsidized health care programs, MinnesotaCare and Medical Assistance, also be required to use a tiered provider system. Tiers would be established based on peer grouping results on quality and efficiency from the 2008 health care reform legislation. Based on that peer grouping, enrollees would be required to choose a primary care clinic and would be rewarded for choosing a higher-quality, lower-cost clinic.

Those financial incentives could be incorporated into EBT card technology and would provide additional benefits to enrollees beyond the standard benefit design, such as over-the-counter medications or reading glasses.

On allowing the sales of health insurance across state borders, "we want to make sure that we don't move down to the lowest common denominator," said Hosch, member of the House Health Care and Human Services Finance Division.

"We regulate insurance in Minnesota, making sure that insurance companies play by Minnesota rules for the benefit of the consumer," he said.

Pawlenty would include a number of consumer-driven requirements, such as that the insurance company must have a certificate of authority in Minnesota, it must agree to Minnesota's claims practices and other consumer protection laws and that it would be subject to standard Minnesota fees and taxes.

"That is different from what we've seen in some of the historical talking points on selling insurance over state lines," Hosch said. "I'm willing to consider that, but at the same time there have been studies that have shown that doing that really doesn't benefit the consumer. But if it can be shown otherwise, I think the Legislature ought to look at it."

Whether allowing the cross border sales will reduce premiums through more competition is still a question mark, he said.

"Right now in Minnesota we have eight non-profit insurers," Hosch said. "We've already spent 10 percent less per person on health care. Minnesota's already a model when it comes to cost per recipient. We want to make sure any reforms doesn't take us backwards from that, but moves us forward."

Pawlenty's proposal to allow more choice for public assistance users is an argument at the federal level as well, Hosch said, as Democrats argue for a national health insurance option, the so-called public option, to compete with private sector insurance.

"We need to have a strong, viable option in order to compete in some areas that only have sole insurers," he said. "And if we can do that, bring in competition and reduce costs while improving performance, we ought to consider that."

Hosch believes that Pawlenty's proposal supports the public option now being debated in Congress. "That's definitely something I think everybody would look through with a favorable lens politically, if we can increase the competition and make sure that we reduce costs while maintaining quality.

"We believe that the public option will do that," he added. "If there are other mechanisms, we'll debate that."

With Pawlenty not seeking a third term in 2010, Hosch says the Democrats "will not abandon health care reform, regardless of who the governor is, regardless if the governor is running for president, regardless if we have half the Legislature running for governor."

The 2010 Legislature will be looking at payment reforms, quality measurements and outcomes, he said. "If we can put that into our health care delivery system by increasing efficiency, electronic medical records, more primary care doctors in rural Minnesota, we're going to continue to do that."